April: A Turbulent Month for Commodities

Mounting tension between Russia and Ukraine, coupled with spring planting season, ignited volatility in many commodity markets in April.

From continued tension between Russia and Ukraine, to the start of the spring planting season in the United States, April was a volatile month in the commodities market.

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Nickel futures notched their highest price in nearly 15 months as the threat of additional sanctions against Russia fueled concern that demand would exceed supply. Futures on the London Metal Exchange rose above $18,500 per ton.

Gold prices also pushed higher. The precious metal is set for its third monthly gain out of four, trading just under $1,300 per troy ounce Tuesday morning.

Weather continues to be a big factor as the U.S. enters a key planting season. Corn futures reached their highest price in almost three weeks on speculation that cold and wet weather in the U.S. will slow planting in the coming week.

Arabica coffee continues to make headlines as it has surged roughly 90% this year, currently trading above $2 a pound. London-based futures broker Marex Spectron said that the harvest in Brazil, where more than a third of world’s output is grown, will drop more than expected in the 2014-2015 season. Spectron anticipates a production level of 49 million bags, down from a January forecast of 55 million and last year’s crop of 53.3 million.

“We see coffee's major technical support level as $1.90,” said Jason Rotman, President of Lido Isle Advisors. “Coffee still has potential to make more big moves higher, especially if the production/supply fears are actually realized. The next key resistance level is $2.30,” he added.